SmFe based alloys interstitially modified with nitrogen are potential candidates for high energy permanent magnets. In order to obtain the optimum properties a thorough understanding of the starting material and processing parameters is required. The microstructures of two cast alloys of composition Sm13.8Fe82.2 Ta4.0 and Sm13.7 Fe86.3 were carefully examined with a SEM equipped with EDX and the exact stoichiometries of the phases were determined. The SmFeTa material was found to contain significant amounts of TaFe2as well as the Sm2Fe17, SmFe2, SmFe3 phases observed in the SmFe material but without the a-iron dendrites which are characteristic of the latter material. The optimum conditions necessary to provide the highest coercivities using the conventional HDDR process, and for the HDDR process combined with pre-milling were investigated. The coercivities obtained after using the HDDR process and subsequent nitriding were 680 kA/m for the SmFeTaN and 360 kA/m for the SmFeN samples. Significantly higher coercivites of 1000 kA/m for SmFeN and 1275 kA/m for SmFeTaN were achieved by reducing the particle size with milling prior to the HDDR process.The better coercivities obtained with the Ta containing sample were found to be due to the presence of a much smaller amount of a. The milling prior to the HDDR treatment improves the magnetic properties because of the small particle size which prevents the grains growing too large, with their consequent very negative effect on the coercivity.